As the Guardian reports this morning:
The government has said it will underwrite a £1.5bn loan guarantee to Jaguar Land Rover (JLR) as the carmaker battles the consequences of a recent cyber-attack.
JLR had to suspend production at its UK factories for several weeks after being targeted by hackers with the shutdown expected to last until at least 1 October.
The loan, from a commercial bank, is expected to give the company's suppliers some certainty.
So, if you're a recklessly irresponsible corporate entity that decided not to insure against this risk, you're underwritten by the state.
But if you're a migrant with indefinite leave to stay in the UK and economic misfortune hits you through unemployment over which you have no control - maybe because your employer failed to take out insurance against cyber attacks - you might now be deported from the UK under Labour's new plans.
The hypocrisy is all too obvious.
And to describe the treatment of Jaguar as anything but socialism for the capitalist classes would be impossible.
Capitalism, my arse, was the phrase that came to my mind. There is one rule for the rich, for whom the state can never do enough, and another for those it should be protecting, who it will, instead, likely dispense with as soon as it can. This is not capitalism. This is state abuse, neoliberal style
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Yes, the state — government — can always find money to prop up and rescue big business or big private finance.
Even when business has been irresponsible, or broken laws — which they get away with — or just behaved with irrational exuberance, because they know the state will bail them out. The too big to fail pay off.
The so-called fiscal rules, and “balancing the books” don’t apply to them.
The money is always there for them.
Privatise the profits, socialize the losses.
Or — Socialism for the rich, capitalism for everyone else.
The playing field of capitalism/neoliberalism has never been a level one.
But no help for Grangemouth oil refinery – it’s in Scotland – where oil is extracted.
Situation normal.
Hopefully not for long.
It’s socialism for the wealthy and for corporations, and fiscal Darwinism for everyone else.
& thus you describe the situation across not just the UK – but the EU. Plenty of other examples- e.g. Germany/Berlin. As somebody said to me – if you think corporate lobbying is bad in Brussels – Berlin is 10x worse. (e.g. renewables, if wholesale elec prices >> the guaranteed @ auction price, owners of the renewable asset (usually large corp) pocket the difference. If wholesale prices fall below the guaranteed @ auction price – then DE gov pays up = corporate socialism. No wonder the AfD etc is gaining ground & the politicos are, mostly, utterly prostrate.
Ha ha ha ha ha ha – indeed!
And another financial crash pending.
But will the ‘most sophisticated electorate in the world’ have an epiphany at all?
Nah! Because they essentially worship the very thing that hurts them.
What was that saying? ‘The greater the ignorance, the more the dogma’.
If Jaguar is owned by the multimillionaire Tata family why on earth are the UK government subsidising them?
No idea…
We asked for a mission-oriented government industrial policy, and now we’ve got it we know what it looks like.
I wonder if we will ever evolve so money becomes irrelevant? It seems the entire concept is about hierarchy and therefore control. If money is produced from nothing then in many ways, it’s already pointless. Aside from Governments being hostile to their population, could everyone be given a set figure a month to live comfortably. I realise UBI has been talked about, but I look for a more Utopian solution not complicated with caveats or behaviour compliance. I am just musing at this point, but it blows my mind that when money is abundant, we have people who have to decide between food or heat.
Money is debt.
Tell me how we can do without it?
Richard, perhaps I don’t understand the issue fully, I grew up in a working class family where the scarcity of money was preached with every bill and Christmas/Birthday. Ultimately, I loathe the inequality, when the Government bail out business at the click of a button and then in the same breath say there is no money for X, there is a problem. My Utopian sensibilities lean toward provision instead of using money as a tool to divide and abuse. Neoliberism should be consigned to history as a failed experiment.
See my freee ebook Money for nothing and my Tweets for free. Just Google it.
Life at the bacterial stage and human beings without money in the hunter-gatherer mode couldn’t do without morality but now using money there’s the pretence by some human beings morality is no longer important. Such people undermine peace and well-being in human societies. They need to be kept in check by a strong and determined democratic process.
https://ankara.lti.cs.cmu.edu/11780/sites/default/files/BacterialLinguisticsandSocialIntelligence.pdf
https://greatergood.berkeley.edu/article/item/political_primates
Even more irritating is that they have largely done it to themselves by keeping the IT system upgrades ‘inside’ the group, i.e., they attempted to maximise returns/profits for the principal shareholders.
On one hand, this does perhaps (only perhaps) mean we will actually get an industrial policy – one which is more than a hands-off approach and an appeal to “market forces”. However, as you observe, the hypocrisy is stunning.
Why were they uninsured? (Apparently, they were in discussions to obtain insurance but such incompetence beggars belief).
Why couldn’t they obtain finance from commercial banks on commercial terms? Either JLR is far riskier than we imagined (quite possible) or it’s our banks. Are either useless (likely) or opportunistic in exploiting misfortune (likely, too).
What are the terms? If we are underwriting it should be made public.
What influence was there from India at a governmental level?
Excellent questions.
It’s bizarre that JLR could not get secured terms.
They have simply taken incompetent ministers for a ride and must be laughing themselves all the way to their bonuses.
I think it is fairly obvious to me at least that in every country the elites are trying to impose all of us into The Sovereign Individual (How to survive and thrive during the collapse of the welfare state is a 1997 [a] non-fiction book by William Rees-Mogg.) – The fiscal rules and social safety nets are being gutted for ordinary individuals and they want us desperate and the bottom 90% of the population like in India or Pakistan living in destitution. Growth of the economy only really seems to equate to the growth for the 10% or top 1% because people at the bottom have no chance.
You would think an international company with the clout of TATA would have the resources to deal with this.
I live near one of their biggest factories and many people in the area rely on them for work.
It’s bailing out the banks all over again.
I hope they have been told to take out insurance against cyber attacks as a condition of the loan.
Reminds me of 1971. All together to the tune of the Red Flag.
The people’s flag is deepest blue
We’re buying up Rolls Royce for you
When it makes a profit – then
We’ll sell it back to them again
Meanwhile the workers have been sent home on lay off terms –
Rate and length of statutory lay-off pay
You’re entitled to guarantee pay during layoff or short-time working. The maximum you can get is £39 a day for 5 days in any 3-month period – so a maximum of £195.
Where’s the support for them?
Effectivey, there is none.
Thanks Richard; you articulate my thoughts so well. Whenever I hear a BBC ‘economics’ broadcast, I haven’t the intellectual capacity to get beyond screaming “Capitalism… my arse!”.
And my answer to your poll in a previous posting today is an emphatic “YES” to AI summaries of your thinking on various subjects.
That endorsement comes from one who HAS read the majority of your 24,060 blog posts AND bought all your books.
Can’t say I’ve read them all because my attention span is as limited as my intellectual capacity.
Also, I’m glad that you have curtailed Comments to a sensible length. They’re now much easier to digest as I’m on a character-controlled diet.
Thanks, and 🙂
No steer will not publish the terms of the deal with JLR but you can expect;
1. It’s likely to be unlimited. Rather like the Brown guarantee to the banks during the Blair PFI bonanza,
2.It will not require JLR to pay everyone in the supply chain.
3. It will not force JLR to pay suppliers in advance of delivery on the basis that the supplier then delivers the parts.
4. It will not stop JLR trying to “recover” the money paid out back from suppliers.
5. It’s highly unlikely that the Tata parent company will be asked to give a guarantee.
Capitalism in it’s current form is not fit for purpose. Here in Lincolnshire, it has been highlighted that it will cost billions to keep the Fens above water. The infrastructure is old and decrepit, but unfortunately Lincolnshire provides a third of the countries vegetables. Our modern capitalist system has put aside the cost of maintenance and left us with a problem so big it could lead to mass starvation in the future. Out of interest, from an MMT lense, if the government just put up the money for infrastructure projects like flood defence, would it have an adverse effect on the economy? I know for a fact that we don’t have the people resources for all the projects we need to undertake. If we just went ahead with them all would it be a bad thing, considering what we would lose if we didn’t?
If we used MMT we would have to work out what really is our priority.
Politicians would have to decide and they definitely do not want to do that.
As I understand it, the gov are not giving money directly to JLR. They are guaranteeing a loan from financial institutions. I don’t know the terms of the loan, but it may well be that the gov will eventually have to pay up/honour the loan if there is a default by JLS, so in many ways it’s like giving them the money directly.
The plus is that existing jobs are protected and new jobs might come along when these threats from hackers are mitigated.
I have to question this:
“The plus is that existing jobs are protected and new jobs might come along when these threats from hackers are mitigated.”
There is no guarantee of that. The loan terms cannot, I am sure, dictate how JLR will use the money.
As Nils Pratley observed in the Business section of the Guardian last Wednesday in the article “Jaguar Land Rover is a rich company – it can pay to support its own supply chain”
“Tata Motors’ first-quarter trading statement, issued on 8 August, a few weeks before the cyber-attack, showed JLR with a cash balance of £3.3bn. When combined with an undrawn revolving credit facility of £1.7bn, total liquidity was put at £5bn.”
The full article is here: https://www.theguardian.com/business/nils-pratley-on-finance/2025/sep/24/jaguar-land-rover-is-a-rich-company-it-can-pay-to-support-its-own-supply-chain
What I find equally worrying in all of this is how easily major companies are hacked by apparently, in many cases, bright young teenagers.
I understand the imperative for Government to step in if there is no market solution (given the importance of the JLR supply chain ecosystem in the national economy). But OBVIOUSLY (apologies for caps, but good grief) the price of the guarantee should be a negotiated equity stake, just like any other distressed investor would expect. If the owners don’t like it, let them find a market solution. What, Oaktree wants 51% and cash pay class A pref shares?? Boo-hoo! There’s an alternative. UK Gov steps in with a genuine interest in making the solution work and, consequently, terms will be better for shareholders than otherwise available from the ‘market’. But no, UK Gov will step in at no material cost to the shareholders! Intelligent, incorruptible politicians would do infinitely better. Where are they?
Agreed